MARKET TREND FOR TODAY
The Markets continued to reel under pressure for the third day in a row as it expectedly failed to maintain a positive trajectory after a strong opening and in the process, failed to capitalize on it as it ended the day with modest losses after paring all of its gains. In the process, the markets have formed higher top but lower bottom on the Daily High Low Charts.
For today, we have a critical session ahead as the trend and behavior of the Markets today shall not only decide the trend for today, but also for next couple of sessions to come.
For today, expect the Markets to open on a mildly negative note and look for directions. The Markets are expected to open flat and thus continue to critically depend upon the intraday trajectory that it shall form during the day and it would continue to remain critically important to decide the trend for today. For today, the levels of 5190 and 5230 shall act as resistance and the levels of 5110 and 5090 are expected to act as supports.
The RSI—Relative Strength Index on the Daily Chart is 49.5363 and it has reached its lowest value in last 14-days which is bearish. Also, RSI has set a new 14-day low whereas NIFTY has not and this is bearish divergence. The Daily MACD continues to trade below its signal line.
On the other hand, on the Candles, A engulfing bearish pattern has occurred. When this occurs during a downtrend, which is the case with NIFTY, it indicates a bullish reversal. However, this need confirmation.
Along with the above reading, the Markets have shown significant addition of Open Interest across all stocks and NIFTY futures. This shows considerable addition of short positions which are likely to act as support on lower levels. Also, FIIs have remained net buyers and the volumes too have remained much on the lower side yesterday. All and all, this signifies that there will be discomfort at lower levels and we may expect some stability to return. Some amount of volatility may be seen. Selective, stock specific approach while avoiding shorts is advised for today.
Milan Vaishnav,
Consulting Technical Analyst,
+91-9825016331
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